The Apothecary, a blog about health care and entitlement reform, is edited by Avik Roy, a Senior Fellow at the Manhattan Institute for Policy Research and a former health-care policy adviser to Mitt Romney. Avik also writes a weekly column on politics and policy for National Review.
The other contributors to The Apothecary are: Josh Archambault, Director of Health Care Policy at the Pioneer Institute in Boston; Robert Book of the American Action Forum; Chris Conover, Research Scholar in the Center for Health Policy and Inequalities Research at Duke University and an Adjunct Scholar at the American Enterprise Institute; Nicole Fisher of the University of North Carolina; John R. Graham of the Advanced Medical Technology Association; and Jeet Guram of Harvard Medical School.

(DISCLOSURE: I am an outside adviser to the Romney campaign on health care issues, but the opinions in this post are mine, and do not necessarily correspond to those of the campaign.)

The Health Affairs study was conducted by Sandra Decker, an economist at the National Center for Health Statistics, a unit of the Centers for Disease Control. Decker pulled data from the CDC’s 2011 National Ambulatory Medical Care Survey in order to calculate the percentage of physicians who accept new patients, based on patients’ insurance status. She found that primary care doctors were 73 percent more likely to reject Medicaid patients relative to the privately insured (34 percent rejection rate vs. 20 percent) and specialists were 63 percent more likely to reject Medicaid patients (28 to 17).

As you can see from the chart, Medicare patients have worse access to primary care physicians, because Medicare’s fees are also decreasing over time, but Medicare patients enjoy superior access to specialists, because specialists are best suited to taking advantage of Medicare’s fee-for-service reimbursement system.

The best performing group, by far, were uninsured patients who pay for care out-of-pocket. Doctors love being paid in cash, because they avoid the hassle of filling out insurance forms when they get paid that way. It’s for this reason that many uninsured Americans have better access to health care than people on Medicaid.

Decker’s results, which come from a survey of 4,326 physicians, are comparable to a 2008 survey of 4,700 doctors that found that physicians were six times as likely to reject new Medicaid patients relative to those who were privately insured. The differences between the numbers in the two studies have to do with survey methodology; the 2008 survey asked doctors if they accepted “all, most, some, or no” patients, whereas the 2011 survey simply asked a yes-or-no question.

But Decker’s most useful contribution is that she breaks out the patient acceptance data on a state-by-state basis. The best showing was by Wyoming, where 99.3 percent of doctors were willing to accept new Medicaid patients. In last place was New Jersey, with 40.4 percent. The five next-worst states were California (57.1%), Florida (59.1%), Connecticut (60.7%), Tennessee (61.4%), and New York (61.6%). I’ve assembled her data onto a map, color-coded by decile. (You can click on the next three charts to enlarge them.)

Notably, most states with poor Medicaid physician access are also notorious for paying doctors poorly. Last month, I described a 2008 Urban Institute study that broke out Medicaid reimbursement rates on a state-by-state basis. Notice a pattern?

Decker has taken my visual analysis to its logical conclusion, by quantifying the correlation between Medicaid fees, as elucidated by the Urban Institute work, and the physician acceptance rates from her own study. Decker found that a 10 percentage-point increase in the ratio between Medicaid and Medicare fees—a 12.5-percentage-point increase relative to private insurance—correlated to a 4 percentage-point increase in doctors’ acceptance rates.

(In the above chart, I reproduced Decker’s data, but using a logarithmic regression rather than her linear one, and including labels for every state. The light blue square is the U.S. average. For you stat geeks, the linear r-square was 0.23.)

Unsurprisingly, the best-paying states, like Wyoming and Alaska, also enjoyed broad physician acceptance of Medicaid, whereas poorly paying states, like New York, New Jersey, and California, had the opposite effect. Mostly, the blue states that have been most aggressive in expanding their Medicaid programs are the ones that have had to rein in costs by paying doctors less, leading to poorer Medicaid access.

Decker ends her piece on an optimistic note, pointing out that Obamacare temporary increases Medicaid’s fees for primary care physicians in 2013 and 2014. As Sarah Kliff observes, “some interest groups already have their eyes on an extension” of the fee bump. In the current fiscal environment, however, it’s hard to see how that fee bump would continue.

Indeed, in the absence of permanent reform, states are continuing to reduce, not increase, their Medicaid fees. States can’t borrow money from China, the way the federal government does. States are already cutting back on education and infrastructure spending in order to feed the Medicaid beast. As Obamacare strives to add 17 million more people to the Medicaid rolls, this problem is going to get worse, not better.

UPDATE: Phil Galewitz of Kaiser Health News talks to a doctor in New Jersey, who says that the Medicaid fee bump won’t make a difference to him, because of its temporary nature:

Robert Maro Jr., a Cherry Hill, N.J. internist, said he has not accepted new Medicaid patients for 15 years because of low pay. He notes the state reimburses him only about $23.50 for a basic office visit, less than half of what he gets from Medicare or private insurers.

Maro said he treats Medicaid patients in the hospital and in nursing homes, but he would lose money treating them in the office where his administrative costs are higher.

He said he would start seeing new Medicaid patients only if knew the pay hike under the health law would continue beyond 2014. Otherwise, he worries he would take on new patients only to see rates fall back to the old levels in 2015, and then he would be required legally and ethically to keep treating them.

“That would be a nightmare,” he said…

New Jersey Medicaid officials acknowledge the lack of physician participation is a problem, but said the recent move to enroll nearly all Medicaid recipients into private managed care plans “should reverse the trend,” said Nicole Brossoie, spokeswoman for the New Jersey Department of Human Services which oversees Medicaid.

Many states have contracted with private managed care companies for the care of Medicaid patients to cut costs and improve care. Brossoie said those companies can pay higher rates to doctors to get them to join their networks, and the state holds the firms accountable for making sure members have access to providers.

New Jersey has not completed any studies measuring patients’ access to care in Medicaid managed care plans, Brossoie said.

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Avik, this is definitely an interesting data set, and I’m glad you took the time to dig into this study. But isn’t the headline a bit misleading? I mean, yes, 1/3 of doctors are rejecting Medicaid patients, but if 20% are ALSO rejecting privately insured patients, it seems to me that we have a serious supply problem. We have baseline of 20% of all PCPs who are turning down new customers. That screams: shortage of doctors.

So if there’s a shortage of doctors, then of course, if you can pick and choose your customers, you’re going to take the patients who will give you more revenue. But the real headline here is that 20% of PCPs aren’t taking on new patients, period.

Hi Alex, that’s a good point — we do have an overall supply problem, which disproportionately affects people on government insurance, because it pays doctors less. In any market with limited supply, sellers migrate to higher prices, as you point out.

As to the rate of private insurance rejection, I’m not ready to read too much into those numbers, because the 2008 study I cited shows a much wider discrepancy, using a more detailed methodology. But it will be interesting if we can uncover why the numbers differ.

Don’t mind me, though. I’m a big “we need more doctors” guy, so sometimes that’s all I see. Given how geographically diffuse the U.S. is, we should have more doctors per capita than dense European countries, not LESS…

Access to health care is no problem – all you have to do is pay for it. Those who expect a free ride should not be surprised at the resistance they get from the rest of us. Those who are gifted free rides by our political elite who then have the favor returned by grateful, greedy votes should not be surprised when the rest of us balk at being fleeced for their benefit.

Our political elite have turned the act of so-called “charity” into one of patronage. Health care is NOT a right, it is a good that can be bought by anyone who cares to buy it. Lying to us and saying that access to health care is a right, when anyone who wants health care can get it simply by paying for it, is a deceitful and deceptive way to justify stealing our money for freeloading voters.

Doctors are absolutely right to not accept Medicaid patients who think they are entitled to the best of care without paying for it. Our entitled voters who have been granted privileges by our political elite have to realize that we cannot afford to keep them in a manner to which they are very accustomed. It is time that we kick them off the dole and tell them they have to pay their own way.

We the people will no longer be enslaved to our political elite who keep themselves in power by handing out our money to those who love all the free stuff they can get. We need to throw OUT every politician who takes our wealth and freedom for their own benefit. No more entitlements, no more free health care, no more free rides.

I can understand this applying to people who are able to work and collecting government benefits. Some of them know how to work the system and they do, but what about the elderly? Are you going to just toss them??

My grandmother is almost 90 years old and my family is already shelling out $3000 a month for her assisted living (which does not include any health-related services) because her “life savings” was wiped out in the first year alone by that monthly rate. Should we make her get a job so she can pay for health insurance or just throw her out on the dole? Just saying.

If you can’t afford insurance and fall into poverty guidelines, then why would you consider it a “free ride?” Do you think that most of the poor want to be poor? Not knowing where their next meal is coming from or if they’ll be able to pay their bills! I despise people like you! And I’m sure you’ve never been poor! I’m sure the poor truly consider being poor, and getting crappy free insurance a real gift!

I know some do. I also know some enjoy living on the street drinking till they get drunk. Now they are in luck for that kidney transplant that normal folks be in line for. We don’t have an unlimited amount of kidneys to go around but at least the poor drunk living on the streets makes the list now. Hope you don’t need a kidney soon.